49) ________ refers to a state where political power is monopolized by a party, group, or
individual that governs according to religious principles.
A) Representative democracy
B) Theocratic totalitarianism
C) Tribal anarchism
D) Monotheistic communism
50) Which system of government generally permits some individual economic freedom but
restricts individual political freedom, frequently on the grounds that it would lead to the rise of
communism?
A) tribal totalitarianism
B) right-wing totalitarianism
C) democratic totalitarianism
D) theocratic totalitarianism
51) In a pure market economy,
A) all productive activities are owned by the state.
B) production is determined by the interaction of supply and demand.
C) collectivist goals are given priority over individual goals.
D) the prices at which goods are sold are determined by the government.
52) The abolition of ________ in a command economy means there is no incentive for individuals
to look for better ways to serve consumer needs.
A) private ownership
B) public ownership
C) government-owned businesses
D) co-operatives
53) The local grocery in a small southern city is the only option for the residents, so it has a
monopoly on the grocery business there. When the population of the city grows and demand for
groceries increases, what is the grocery store most likely to do?
A) Restrict output to drive prices down.
B) Increase output to drive prices down.
C) Restrict output and let prices rise.
D) Increase output and let prices rise.
54) In a ________, if demand for a product exceeds supply, prices will rise, signaling to producers
to produce more.
A) mixed economy
B) market economy
C) collectivist economy
D) command economy
55) In 2008, the U.S. government took an 80 percent stake in AIG to stop that financial institution
from collapsing, the theory being that if AIG did collapse, it would have very serious
consequences for the entire financial system. What type of economy is this an example of?
A) command
B) mixed
C) capitalistic
D) market
56) An economy in which the interaction of supply and demand determines the quantity in which
goods and services are produced is called a
A) planned economy.
B) command economy.
C) closed economy.
D) market economy.
57) Which of the following is a reason that command economies tend to stagnate?
A) Costs are tightly controlled and business are forced to be efficient rather than dynamic and
innovative.
B) The abolition of private ownership means there is no incentive for individuals to look for better
ways to serve consumer needs.
C) All economic resources are mobilized for the public good.
D) Individuals in command economy countries lack the skills to be innovative.
58) Antitrust laws in the United States are designed to
A) restrict agricultural subsidies.
B) increase trade barriers.
C) outlaw monopolies.
D) restrict privatization.
59) In a(n) ________ economy, the government plans the goods and services that a country
produces, the quantity in which they are produced, and the prices at which they are sold.
A) market
B) command
C) open
D) laissez-faire
60) In a ________ economy, certain sectors of the economy are left to private ownership and free
market mechanisms while other sectors have significant state ownership and government
planning.
A) market
B) private
C) command
D) mixed
61) In which of the following economies would the government be most likely to take into state
ownership troubled firms whose continued operation is thought to be vital to national interests?
A) market economies
B) laissez-faire economies
C) liberal economies
D) mixed economies
62) Which of the following statements about the legal systems of countries is true?
A) They can affect the attractiveness of a country as an investment site or market.
B) They are not influenced by the prevailing political system of the country.
C) They are almost the same for all countries.
D) They are of little importance to international business.
63) One key component of a country’s legal system is
A) establishing a mixed economy.
B) taking a hands-off approach to business practices.
C) defining the rights and obligations of those involved in business transactions.
D) leaving the monitoring of the way business transactions are executed to the United Nations.
64) Under the ________, cases are judged with reference to three characteristics: tradition,
precedent, and custom.
A) theocratic law system
B) civil law system
C) contract law system
D) common law system
65) A civil law system tends to be less adversarial than a common law system because the
A) judges’ decisions are based on detailed legal codes.
B) judges have the freedom to interpret laws based on the situation.
C) judges’ decisions are based on religious teachings.
D) judges are guided by interpretations made in prior legal cases.
66) A common law system is different from a civil law system because
A) a common law system is based on religious teachings, while a civil law system is based on
cultural traditions.
B) a common law system is very rigid, while a civil law system tends to be more flexible.
C) in a common law system a judge relies on legal codes to make rulings, while in a civil law
system a judge relies on his intuition and moral reasoning to make judgments.
D) in a common law system a judge has the power to interpret the law, while in a civil law system
a judge has the power only to apply the law.
67) A ________ law system is based on a very detailed set of laws organized into codes.
A) traditional
B) theocratic
C) civil
D) common
68) A theocratic law system is one in which the law is based on
A) religious teachings.
B) tradition, precedent, and custom.
C) a detailed set of laws organized into codes.
D) cultural and social norms.